Varig shareholders have approved a fundraising scheme intended to raise $850 million for the struggling Brazilian flag carrier. But the deal depends on national development bank BNDES agreeing to take $300 million in unsecured non-convertible debt.
Varig also plans to issue $550 million worth of stock, reducing the share held by the Ruben Bertas Foundation from 87% to under 50%.
"We're open to any investor, and other airlines will also be welcomed," says Varig chief executive Ozires Silva. He has set 30 October as the completion date for the process. Company and industry sources say the next 90 days will be the most testing period in the airline's 75-year history. Silva indicates that the carrier may have to return more aircraft to lessors and lay off staff to keep afloat until October. Varig has recently returned two Boeing 737-300s, five 737-700s and one Boeing MD-11 to lessors.
Source: Flight International
